Origin warns of inefficient power investment

The nation’s largest energy retailer has warned carbon tax uncertainty means at least five more years of investment in inefficient power stations, in comments that suggest further price pressures for consumers.

The warning came as federal Treasury secretary
Martin Parkinson
said “the continuing uncertainty about the policies Australia might pursue in response to climate change" was a bigger risk to investment than the carbon price.

Dr Parkinson also left open the option of quitting his position after the election if he did not like Opposition Leader
Tony Abbott
’s direct action policy.

As former Reserve Bank of Australia member Warwick McKibbin urged Coalition leader Mr Abbott to “fix . . . don’t destroy" Labor’s carbon scheme,
Origin Energy
managing director
Grant King
said there would be “quite a period of uncertainty ahead of us, no matter what".

Mr King said the five years of continuing uncertainty over the policy on carbon– adding to the 10 years so far – would prompt companies to invest in the lowest-cost means of meeting growing energy demands, even if those plants would only be used for peak-demand periods.

“We say to you: buy electricity from us and here will be the price and on the hottest day of the year when you want your air-conditioning to work it will work," he said in Sydney.

But Mr King rejected the view that putting a price on carbon would mean a significant rise in the cost of household energy that would burden many consumers.

In testimony to a senate estimates committee, Dr Parkinson also said the cost impact of the carbon tax or mining resource rent tax were “very, very small".

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But Liberal Senator Mathias Coremann put Dr Parkinson on notice, saying a coalition government would be elected on the platform of rescinding the carbon tax. “Is it fair of me to assume that if a future government is elected on a policy of rescinding the carbon tax, that you would equally professionally assist such a government implementing a policy to rescind a carbon tax in the future," he asked after praising the Treasury secretary for his commitment to this and former governments.

Dr Parkinson, a former head of the Climate Change department, said a public servant had a “choice in front of them" under a new government and could leave.

“If they’re not prepared to implement the policies the government chooses to pursue, [and] that government’s been democratically elected, then they essentially have to make a choice with their feet," he said.

“Whether I was secretary of the Treasury would be a matter for the prime minister of the day. Were I to do so, I would serve the government of the day in the way as you said I have served previous governments in this way."